New Ports Contract Would Raise Pay
32%, Bring Dockworkers $70 Million in
Bonuses

 

This week’s tentative agreement at West Coast ports is the latest union deal to bring sizable wage increases to transport workers

 

West Coast dockworkers won a 32% pay increase through 2028 and will get a one-time “hero bonus” for working through the pandemic under a tentative contract agreement reached with port employers, according to people familiar with negotiations.

The agreement announced late Wednesday, which must be ratified by employers and dockworkers, includes improvements in benefits and other provisions reached after more than a year of contentious negotiations that led some importers to divert shipments away from West Coast ports and led to fears of greater impact on U.S.-Asia trade flows.

The six-year pact is the latest in a series of labor agreements reached in recent months that have delivered big wage increases for transport workers, including those who kept people and cargo moving during Covid-19.

FedEx and its unionized pilots recently reached a tentative contract agreement that calls for a 30% pay increase and a 30% increase in pilots’ legacy pensions. Earlier this year, pilots at Delta Air Lines won a 34% pay increase over four years and pilots at Spirit Airlines won a 34% increase over a two-year period.

NEWSLETTER SIGN-UP

The Logistics Report

Top news and in-depth analysis on the world of logistics, from supply chain to transport and technology.

The West Coast dockworker deal also comes as United Parcel Service and the International Brotherhood of Teamsters are deep in talks over a new collective bargaining agreement. The International Longshoremen’s Association is negotiating with employers at U.S. East Coast and Gulf Ports to replace a contract that expires next year.

The West Coast ports deal came as sporadic labor disruptions at ports in Los Angeles, Long Beach, Oakland and Seattle delayed cargo. Acting Labor Secretary Julie Su flew this week to San Francisco to meet with both sides in an effort to calm tensions and push through an accord.

The International Longshore and Warehouse Union, which represents more than 22,000 West Coast dockworkers, as well as employers involved in the labor talks, declined to disclose details of the agreement.

People familiar with the talks say the deal would give dockworkers a raise of $4.62 an hour in the first year of the contract—the equivalent of a 10% wage increase—plus an additional $2 an hour in each subsequent year. The last multiyear contract expired last summer, so dockworkers will receive wage increases retroactive to July 1.

Dockworkers will also share in a one-time payment of $70 million, referred to as a “hero” bonus, according to people familiar with the negotiations, in recognition of the work they did keeping cargo moving through the pandemic.

The dockworkers’ union had pushed to double pay over the course of the contract when the talks turned to wages in May. Dozens of dockworkers died keeping ports open during the depths of the Covid-19 pandemic as surges in cargo delivered tens of billions of dollars in profits for the world’s largest ocean carriers, who are mostly based overseas.

President Biden said Wednesday that dockworkers had “served heroically through the pandemic” and will “finally get the pay, benefits and quality of life they deserve.”

The basic hourly pay for a dockworker last year was $46.23. The Pacific Maritime Association, which represents employers at 29 ports from California to Washington state, said that because of bonuses and overtime the average full-time dockworker last year earned more than $200,000.

U.S. retailers and manufacturers have been diverting some of their most time-critical clothes, electronics and seasonal goods to East Coast and Gulf Coast ports for much of the past year amid fears of labor disruptions and a possible strike. Jason Seidl, an analyst at TD Cowen, wrote in a research report Thursday that he expected 90% of the cargo that shifted away from Los Angeles and Long Beach would return because of the “natural and longstanding competitive advantages” of the ports.

Trade groups representing the nation’s largest importers welcomed the tentative agreement. Jonathan Gold, vice president of supply chain at the National Retail Federation, said Thursday that companies won’t shift diverted cargo back to the West Coast until the labor deal is ratified.

The ILWU said the ratification process would take a few months.

Leave a comment